The Cost of Others Making Choices for You

The journal Applied Economics just released a paper entitled "Choosing for Others" that I coauthored with Stephan Marette and Bailey Norwood.  The paper builds off our previous research that aimed to study the value people place on the freedom of choice by trying to explicitly calculate the cost of others making choices for you (at least in our experimental context).  

The motivation for the study:

It is not uncommon for behavioural economic studies to utilize experimental evidence of a bias as the foundation for advocating for a public policy intervention. In these cases, the paternalist/policymaker is a theoretical abstraction who acts at the will of the theorist to implement the preferred plan. In reality, paternalists are flesh-and-blood people making choices on the behalf of others. Yet, there is relatively little empirical research (Jacobsson, Johannesson, and Borgquist 2007 being a prominent exception) exploring the behaviour of people assigned to make choices on another’s behalf.

The essence of the problem is as follows:

When choices are symmetric, the chooser gives the same food to others as they take for themselves, and assuming the recipient has the same preferences as the chooser, the choice inflicts no harm. However, when asymmetric choices occur, an individual receives an inferior choice and suffers a (short-term) welfare loss. Those losses might be compensated by other benefits if the chooser helps the individual overcome behavioural obstacles to their own,
long-run well-being. However, the short-term losses that arise from a mismatch between outcomes preferred and received should not be ignored, though they often are, and this study seeks to measure their magnitude in a controlled experiment.

What do we find?

We find that a larger fraction of individuals made the same choices for themselves as for others in the US than in France, and this fraction increased in both locations after the provision of information about the healthfulness of the two choices.


What is interesting is that the per cent of paternalistic choices declined in both the US and France after information was revealed, with a very small decline in France and a considerable decline in the US. The per cent of indulgent choices also declined after information, so the effect of information was that it largely reduced asymmetric choices. Information substituted for paternalism. After information, choosers selected more apples for themselves and more apples for others, such that there was less need for paternalism to increase apple consumption.